By Darrell Martin
When the US Federal Open Market Committee meets it provides several opportunities for traders. The Committee is meeting October 28 and 29 with their news being released at 2:00 PM on Wednesday, October 29, 2014. The FOMC tells investors and traders about the economic outlook. This is also where the members of this committee vote on where to set the interest rate.
This is extremely important to traders because the short term interest rates are the primary factor in the valuation of currency. The Fed Funds Target Rate is forecast to be 0.25%. The previous reading was 0.25%. It has remained unchanged throughout 2014. If the rate is higher than expected, that would be positive or bullish for the USD. A lower than expected rate would be negative or bearish for the USD side of your instrument.
A good strategy to use on this type of news event is the Iron Condor using Nadex Spreads. This time you can use several instruments, each involving the USD. You can look for Iron Condors on EUR/USD, GBP/USD or USD/CHF entering as early as 11:00 AM, but no later than 1:00 PM. An expiration of 3:00 PM will give your trade plenty of time to make its move. On each of these instruments, you will want a minimum profit of $50. As a reminder, an Iron Condor is where you buy the lower spread and sell the upper spread with the ceiling of the lower spread equal to the floor of the upper spread.
If you would like to try another approach to this strategy, you can enter several trades at different intervals.
At 90 minutes before the news announcement, you can still do the Iron Condor strategy, but look to enter as early as 12:30 PM with an 2:00 expiration on the following instruments:
AUD/USD with a minimum profit of $25.
EUR/USD with a minimum profit of $35.
GBP/USD with a minimum profit of $40.
USD/CAD with a minimum profit of $30.
USD/CHF with a minimum profit of $40.
USD/JPY with a minimum profit of $30.
At 60 minutes before the news announcement, enter as early as 1:00 PM, still implementing a 2:00 PM expiration on the following instruments:
AUD/USD with a minimum profit of $20.
EUR/USD with a minimum profit of $30.
GBP/USD with a minimum profit of $35.
USD/CAD with a minimum profit of $25.
USD/CHF with a minimum profit of $30.
USD/JPY with a minimum profit of $25.
With just 30 minutes before the news announcement, you can look for Iron Condors to enter as early as 1:30 PM with the expiration time of 2:00 PM on the following instruments:
AUD/USD with a minimum profit of $20.
EUR/USD with a minimum profit of $25.
GBP/USD with a minimum profit of $30.
USD/CAD with a minimum profit of $20.
USD/CHF with a minimum profit of $25.
USD/JPY with a minimum profit of $20.
As you can see, there are ample trading possibilities with this news release. If you would like more information on other trading strategies, go to www.apexinvesting.com. Apex Investing Institute offers free education, and free access to the Nadex Binary and Spread Scanner Analyzers. Member traders are invited to trade in the chat rooms, take advantage of trade signal services, have key indicators and access the Apex Forum. The forum content is updated daily and includes over 8000 members. In a supportive learning community of seasoned as well as up and coming traders, traders of all levels learn how to trade Nadex binaries and spreads in depth, as well as futures, forex, stock and options, and gain an edge for successful trading overall.